1st July 2014
Standard Life and the Financial Services Compensation Scheme (FSCS) are working together to ensure that those Standard Life SIPP members who make a successful Catalyst claim through FSCS are not subject to any adverse tax and HMRC reporting requirements if FSCS makes recoveries in relation to their claims.
Once FSCS pays compensation for claims against Catalyst it would expect to take an assignment of a claimant’s rights to pursue claims against Catalyst and any other party responsible for the loss. In this case this is likely to include ARM Asset Backed Securities SA. FSCS will use any recoveries it makes from these claims to offset the cost of compensation, and in certain circumstances, make payments to the original investors.
Where the claimant made their investment through a SIPP, FSCS ordinarily requires the SIPP trustee to assign its interests in the members’ investments as well. This enables FSCS to pursue claims for recoveries, and to make any payments out of recoveries due under FSCS’s rules directly to the claimant. Standard Life is concerned that an assignment of Standard Life’s interests, as trustee, may result in an “unauthorised payment” leading to a potential tax liability.
As noted above, Standard Life and FSCS are working together to understand the tax position, and will be liaising with HMRC accordingly. Once the tax consequences have been confirmed, Standard Life and FSCS will agree the appropriate approach and provide a further update.
FSCS is continuing to process claims whilst clarification is sought from HMRC, but will not be in a position to make offers of compensation to Standard Life SIPP members until the matter is resolved.
Standard Life will be contacting its SIPP customers with further details in due course.
For any queries relating to the FSCS claims process please contact our Initial Contact Team on Freephone 0800 678 1100 or 020 7741 4100.
We thank you for your patience in this matter.